THIRD DIVISION

[G.R. No. 150470. August 6, 2008.]

SPOUSES FELIPE and VICTORIA LAYOS , petitioners, vs . FIL-ESTATE

GOLF AND DEVELOPMENT, INC., LA PAZ HOUSING AND
DEVELOPMENT CORPORATION, REPUBLIC OF THE PHILIPPINES,
AND THE SPOUSES MARINA AND GENEROSO OTIC , respondents.

DECISION

CHICO-NAZARIO , J : p

Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court
filed by petitioner-spouses Felipe and Victoria Layos (Spouses Layos) seeking the reversal
and setting aside of the Decision 2 dated 26 April 2001 of the Court of Appeals in CA-G.R.
CV No. 61759, which affirmed the Order 3 dated 19 January 1998 of the Regional Trial
Court (RTC), Branch 93 of San Pedro, Laguna, summarily dismissing the spouses Layos'
Petition for Reconstitution of Original Certificate of Title (OCT) No. 239 in LRC Case No. B-
1784. Likewise being assailed in the Petition at bar is the Resolution 4 dated 18 October
2001 of the appellate court denying the Spouses Layos' Motion for Reconsideration of its
earlier Decision.
The factual and procedural antecedents of the case presently before this Court, by
themselves, appear deceptively simple. However, they are so intimately linked with other
cases the factual backgrounds and judicial resolutions of which the Court must also
necessarily present herein.
I
FACTUAL BACKGROUND
G.R. No. 120958:
The Injunction Cases
The Court begins with Fil-Estate Golf and Development, Inc. v. Court of Appeals, 5 a case
which it decided more than a decade ago. The said case arose from the following facts:
Petitioner Fil-Estate Golf & Development, Inc. (FEGDI) is the developer of the
Manila Southwoods golf course and residential subdivision project which partly
covers lands located in Biñan, Laguna. Its partner in the joint venture, La Paz
Housing and Development Corporation (La Paz), provided the aforementioned
properties which are registered in its name. The project involves the "construction
and development of, among others, a highway interchange linking nearby
communities to the South Expressway and world class tourism-generating
cultural theme and water parks." THESAD

On 29 December 1992, a certain Felipe Layos filed a complaint for Injunction and
Damages with Application for Preliminary Injunction against Fil-Estate Realty
Corporation, (FERC) et al. with the Regional Trial Court of Biñan, Laguna and
docketed as Civil Case No. B-3973.

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 It was alleged in the said complaint that Felipe Layos is the legal owner and
possessor of two (2) parcels of land having a total area of 837,695 square meters
located at Barrio Tubigan, Biñan, Laguna, known as Lots 1 & 2 of Plan Psu-201 of
the Bureau of Lands having acquired the same from his father, Mauricio Layos,
who in turn inherited said properties from his own father, Natalio Layos, allegedly
the original owner thereof. Layos claimed that the Southwoods project
encroached upon the aforecited lands and thus contended that his rights of
ownership and possession were violated when FERC brought in men and
equipment to begin development of the said properties.

On 2 February 1993, FERC filed an Opposition to Application for Writ of

Preliminary Injunction and explicitly stated therein that the developer of the
Southwoods project is its sister company, FEGDI. THADEI

On 5 March 1993, FEGDI filed an Answer to the abovementioned complaint and

reiterated that it is the developer of the Southwoods project and not FERC and
that the land covered by the project is covered by Transfer Certificates of Title in
the name of La Paz, copies of which were attached to said answer as annexes.

On 29 March 1993, Presiding Judge Justo M. Sultan of the Regional Trial Court of
Biñan, Laguna issued an order denying the prayer for preliminary injunction in
Civil Case No. B-3973 in view of the inability of Layos to substantiate his right.
Neither he nor his counsel appeared on the scheduled hearings. . . .

xxx xxx xxx

On 25 June 1993, Felipe Layos along with his wife and other individuals filed
another case for Injunction and Damages with Prayer for Preliminary Injunction
with the Regional Trial Court of San Pedro, Laguna docketed as Civil Case No. B-
4133, this time against the correct party, FEGDI.
The complaint in the San Pedro case (Civil Case No. B-4133) is basically identical
to that filed in the Biñan case (Civil Case No. B3973), except for changes in the
number of party-plaintiffs and party-defendants and in the area size of the
claimed landholdings. Further, in the San Pedro case there is reference to a title
(OCT No. 239), a specific date of intrusion and an increase in the damages
prayed for. cSTHaE

On 1 July 1993, FEGDI moved to dismiss the San Pedro case on grounds of litis
pendentia, forum-shopping, lack of cause of action and lack of jurisdiction. FEGDI
argued that a similar complaint was previously filed with the Regional Trial Court
of Biñan, Laguna and is currently pending therein. It, likewise, accused the private
respondents of forum-shopping, stating that the latter instituted the San Pedro
case after their application for preliminary injunction was denied by the Biñan
court. Anent the third and fourth grounds, FEGDI averred that the documents
relied upon by the private respondents are of doubtful veracity and that they
failed to pay the correct filing fees considering that the San Pedro case is a real
action as allegedly revealed in the body of the complaint. The Layoses filed their
opposition on 5 July 1993 arguing in the main that there is no litis pendentia
because there is no identity of parties. Felipe Layos claimed that he never
authorized the filing of the Biñan case and that the defendant therein is the Fil-
Estate Realty Corporation not the Fil-Estate Golf & Development, Inc.
Consequently, the two cases being dissimilar, there can be no forum-shopping.
Private respondents contended, likewise, that they have satisfied all the
requirements of a valid cause of action and insisted that the suit is not for
recovery of possession but is a personal action for injunction and damages. On
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 12 July 1993, Judge Stella Cabuco-Andres of the San Pedro Regional Trial Court
issued an order denying FEGDI's motion to dismiss. The Motion for
Reconsideration filed by FEGDI on 13 July 1993 was similarly denied by the
aforesaid court in an order dated 14 July 1993.

On 15 July 1993, FEGDI filed a Petition for Certiorari and Prohibition with
Application for Preliminary Injunction with the Court of Appeals (docketed as CA-
G.R. SP No. 31507) assailing the denial of its motion to dismiss the San Pedro
case. The arguments and issues raised by petitioner to support its motion to
dismiss were the same issues raised in the aforestated petition.

On 20 July 1993, the Court of Appeals issued a temporary restraining order

enjoining Judge Andres from proceeding with the San Pedro case. DTIaCS

Meanwhile, the Regional Trial Court of Biñan, Laguna, in an order dated 25

January 1994, dismissed the Biñan case without prejudice on grounds of forum-
shopping. FEGDI moved for a partial reconsideration of the said order praying
that the dismissal be with prejudice. Hence, on 25 April 1994, the aforestated
court dismissed the Biñan case with prejudice to forestall the plaintiffs therein
from forum-shopping. . . .

xxx xxx xxx

On 10 March 1995, the Court of Appeals, dismissed FEGDI's petition for lack of
merit. . . . .

FEGDI's motion for reconsideration was subsequently denied in the Court of

Appeals' resolution dated 13 July 1995. Hence, this petition for review. 6

FEGDI came to this Court via a Petition for Review on Certiorari under Rule 45 of the Rules
of Court, docketed as G.R. No. 120958. The Court granted the Petition and ruled in favor of
FEGDI. EScaIT

The Court found that therein private respondents, which included the Spouses Layos, did
commit forum shopping by instituting similar proceedings for injunction before the RTCs
of Biñan and San Pedro, Laguna:
Private respondents have indeed resorted to forum-shopping in order to obtain a
favorable decision. The familiar pattern (of one party's practice of deliberately
seeking out a "sympathetic" court) is undisputedly revealed by the fact that after
Felipe Layos instituted in 1992 a case for injunction and damages with
application for preliminary injunction in the Regional Trial Court of Biñan, Laguna
and after his prayer for a preliminary injunction was denied in March 1993, he and
his wife, together with four (4) alleged buyers of portions of the land claimed by
him, filed an identical complaint for injunction and damages with preliminary
injunction a few months later, or in June 1993, this time with the Regional Trial
Court of San Pedro, Laguna.
Having been denied their temporary restraining order in one court, private
respondents immediately instituted the same action in another tribunal — a
deliberate tactic to seek out a different court which may grant their application for
preliminary injunction, or at least give them another chance to obtain one.
Private respondents parry petitioner's allegation of forum shopping by adamantly
contending that Felipe Layos did not, in any manner, authorize the filing of the
Biñan case. Moreover, they insist that Felipe Layos' signature in the Biñan
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 complaint is a forgery and that he neither appeared nor participated in the
proceedings before the Biñan court. cETCID

We find no merit in private respondents' assertions. The almost word-for-word

similarity of the complaints in both the Biñan and San Pedro cases totally refutes
such a theory, as can readily be observed from a comparative view of the two
aforementioned complaints . . . .

xxx xxx xxx

Even the affidavits attached to the two complaints are virtually identical . . .
xxx xxx xxx

Examining the two complaints one can easily discern that the San Pedro
complaint is simply an "improved" version of the Biñan complaint and the
similarity does not end there. The residence certificates (of Felipe Layos) used in
the verification of both complaints are practically identical — same number, date
of issue and place of issue.

If indeed there is a "ghost Mr. Layos", as claimed by the private respondents, the
genuine Felipe Layos and the rest of the private respondents should have, on their
own volition, denounced the allegedly bogus case filed with the Biñan court or at
the very least, informed the San Pedro court about it. It cannot be denied that
private respondents were aware of the Biñan case considering that Annex C
(Affidavit of Self-Adjudication with Sale) of the San Pedro complaint was a mere
photocopy of Annex B of the Biñan complaint.

Private respondents likewise aver that there is no identity of party-defendants in

view of the fact that the defendant in the Biñan case is the Fil-Estate Realty
Corporation (FERC) and in the San Pedro case the Fil-Estate Golf and
Development, Inc. (FEGDI), two completely separate and distinct entities. aEACcS

Private respondents' contention is unmeritorious. In the Biñan case, FEGDI

voluntarily submitted to the court's jurisdiction by filing its answer and expressly
stating therein that it is the developer of Southwoods, and not its sister company,
FERC. Moreover, the Biñan court in its orders dated 25 January 1994 and 20
October 1994 expressly recognized FEGDI as the defendant in the said case.
There can be no question then that in both cases FEGDI is the true party-
defendant.
As clearly demonstrated above, the willful attempt by private respondents to
obtain a preliminary injunction in another court after it failed to acquire the same
from the original court constitutes grave abuse of the judicial process. Such
disrespect is penalized by the summary dismissal of both actions as mandated
by paragraph 17 of the Interim Rules and Guidelines issued by this Court on 11
January 1983 and Supreme Court Circular No. 28-91. . . .
xxx xxx xxx
The rule against forum-shopping is further strengthened by the issuance of
Supreme Court Administrative Circular No. 04-94. Said circular formally
established the rule that the deliberate filing of multiple complaints to obtain
favorable action constitutes forum-shopping and shall be a ground for summary
dismissal thereof . . . . 7
TaCDAH

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 The Court further pronounced that the Complaint in the San Pedro case did not state a
cause of action. Taking into consideration the Complaint itself and its attached annexes,
as well as the other pleadings submitted by the parties, the Court found that:
In the San Pedro complaint, private respondents anchored their claim of
ownership on an OCT No. 239 and on a survey plan Psu-201 in the name of
Natalio Layos, copies of which were attached to the complaint. His son and sole
heir Mauricio Layos inherited the properties covered by the said plan. In turn,
Felipe Layos became the owner thereof through an Affidavit of Self-Adjudication
with Sale executed by Mauricio Layos, his father. This is where the inconsistency
materializes. In the said Affidavit of Self-Adjudication with Sale which was also
attached to the San Pedro complaint as Annex "C", Mauricio Layos categorically
stated that the subject properties (Lots No. 1 and 2 of Plan PSU-201) were not
registered under the Spanish Mortgage Law or under the Property Registration
Decree. If the properties in question were not registered, where did the OCT No.
239 come from? Mauricio Layos' express admission not only contradicts but
indubitably strikes down the purported OCT No. 239 and exposes private
respondents' claim as a sham. This inconsistency is patent in the documents
attached to the complaint which form part and parcel of the complaint. The
Affidavit of Self-Adjudication with Sale attached to the complaint is the crucial
and indispensable basis for private respondents' claim of ownership and interest
in the subject properties, without which they have no right of action or personality
in the case. Necessarily, the Affidavit of Self-Adjudication is a vital part of the
complaint that should be considered in the determination of whether or not a
cause of action exists. EHcaAI

Private respondents' inconsistency is further manifested by the 1992 application

for original registration filed by Mauricio Layos with the Regional Trial Court of
Biñan, Laguna (docketed as Civil Case No. B-542) for the lots under Plan Psu-201.
Why would Mauricio Layos file an application for the registration of the land
claimed by him if it is already covered by OCT No. 239? The conclusion is
inescapable that the document is fake or a forgery.
Finally, private respondents' cause of action against petitioner is defeated by the
findings of Mr. Privadi Dalire, Chief of the Geodetic Surveys Division of the
Bureau of Lands, contained in his letters to the Regional Technical Director of the
Department of Environment and Natural Resources (DENR), Region IV dated 12
November 1992 and 15 December 1992, respectively:
12 November 1992

The Regional Technical Director of Lands

DENR, Region IV, 1515 L & S Building
Roxas Boulevard. Manila

ATTN.: Engr. ROBERT C. PANGYARIHAN

OIC, Surveys Division

Sir:
In connection with your request to validate the white print copy of an alleged plan
Psu-201 which you had issued and certified that it is a copy of the tracing cloth of
Psu-201 which is on file in that Office, please forward to us the tracing cloth plan
to be examined instead of the white print copy that you have issued in
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 accordance with the procedure stated in DENR Administrative Order regarding
validation of plans other than the original copies being sent to the region office.
It may be worthwhile to state for your information that the plan Psu-201 is not
among those officially enrolled into the file of this Bureau. What is more
confusing is that the inventory book of all plans that were recovered after the war
shows that Psu-201 is a survey for J. Reed covering a piece of land in Malate,
Manila but the plan that was salvaged was heavily damaged and therefore it was
not also microfilmed. This would require therefore a more exhaustive research
regarding the authenticity of the tracing cloth that is in your file. (Italics ours.)
ICTcDA

Very truly yours,

For the Director of Lands:
(SGD.) PRIVADI J.G. DALIRE

Chief, Geodetic Surveys Division

xxx xxx xxx
MEMORANDUM:
15 December 1992

FOR: The Regional Technical Director of Lands

The Chief, Regional Surveys Division
DENR, Region IV
L & S Building, Roxas Boulevard
Manila

FROM: L M B
SUBJECT: Psu-201
Records show that the region furnished us a white print copy certified by Engr.
Robert Pangyarihan to have been "prepared from a tracing cloth plan on file in the
NCR" for validation. We returned the white print plan prepared by Engr.
Pangyarihan because we should examine the "tracing cloth plan" and it is the
tracing cloth plan, white prints and photographic copies sent by the Central
Records Division to be returned to LMB for validation by this Division.
In the letter dated 27 November 1992, Engr. Pangyarihan explained that he
prepared the copy which he certified from a white print plan on file in the region
as the applicant claims to have lost the tracing cloth. While the explanation may
be considered, yet the preparation of the plan is not yet in accordance with
Section 1.3 and 4.3 of DENR Administrative Order No. 49, s-1991 which requires
that the white prints or photographic print of the plan other than the original plan
which have been decentralized must first be authenticated by this Bureau before
a certified true copy is issued by the region. It is evident therefore that the
issuance of a certified true copy of Psu-201 from a white print is premature, and
considered void ab initio.

Consider also that if the record of the Bureau is different from the print copy is
subjected to field ocular inspection of the land and on the basis of the findings,
the region may reconstruct the plan to be approved as usual. Certified copies may
now be issued based on the reconstructed and approved plan. The white print of
Psu-201 should therefore be subjected to ocular inspection. cADEHI

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 Our records of inventory of approved plans show Psu-201 as a survey of J. Reed
covering a piece of land in Malate, Manila. That plan was heavily damaged and
its reconstruction was not finalized. This should be included in the investigation.
(Italics ours.)
For the Director of Lands:
(SGD.) PRIVADI J.G. DALIRE
Chief, Geodetic Surveys Division.
Consequently, Mr. Sidicious F. Panoy, the Regional Technical Director of DENR,
Region IV, issued an order dated 5 May 1994 cancelling all copies of plans
pertaining to Psu-201. The order states that:
IN RE: CANCELLATION ORDER:
Plan Si-14769
True copy of Plan Claimant-Sofronio Olano
Si-14779 and Psu-201 Brgy Bukal ng Tala & Hasaan
Municipality of Ternate, Cavite
Area: 13,321,977 sq. m.
Plan Psu-201
Claimant — Natalio Layos
Brgy. Tubigan, Biñan, Laguna
Area: 837,695 sq. m.
ORDER
By way of reaction to a number of inquiries as to the status of plans Si-14769 and
Psu-201, verification was made at the Technical Reference Section of the Land
Management Bureau, Escolta, Manila as to the authenticity thereof on the basis
of still recoverable records and the following facts were established, to wit: CcAESI

1. That Psu-201 is an original survey for J Reed located in Malate,

Manila; and

2. That Si-14769 is a survey number for the plan of a land parcel

situated in Bo. Bessang, Municipality of Allacapang, Province of
Cagayan in the name of Gregorio Blanco.
The purported blue print plan of Psu-201 indicating the land covered thereby to be
situated in Bo. Tubigan, Biñan, Laguna and claimed by Natalio Layos and
comprising 837,695 sq. meters is, therefore, a spurious plan and, probably the
result of a manipulative act by scheming individuals who surreptitiously got it
inserted in the records. The same can be said as to the blue print of Si-14769
which is a plan purportedly covering a parcel of land situated in Bo. Bukal ng Tala
and Hasaan, Ternate, Cavite comprising 13,321,977 sq. meters. (Italics ours.)

WHEREFORE, in view of the foregoing, all plans pertaining to the above and
indicated as true copies and bearing the signature of Engr. Robert C. Pangyarihan
are as hereby IT IS CANCELLED including any document attached thereto and, as
such, declared null and void and of no force and effect. CAIHaE

SO ORDERED.
5 May 1994.
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 (SGD.) SIDICIOUS F. PANOY
Regional Technical Director
It is quite evident from the foregoing findings on record that private respondents'
claim of ownership is totally baseless. Plan Psu-201 pertains to land located in
Malate, Manila and said survey plan was made for a certain J. Reed.
In the case at bar, the technical rules of procedure regarding motions to dismiss
must be applied liberally lest these very same rules be used not to achieve but to
thwart justice. 8

Consequently, on the grounds of forum shopping and lack of cause of action, the Court
decreed in G.R. No. 120958 as follows:
WHEREFORE, premises considered, the petition for review on certiorari is hereby
GRANTED. Private respondents' complaint docketed as Civil Case No. B-4133 is
hereby DISMISSED. 9

In a Resolution dated 19 February 1997, the Court refused to reconsider its afore-quoted
Decision and dismissed with finality G.R. No. 120958.
CA-G.R. CV No. 50962:
The Quieting of Title Case
On 12 August 1993, only months after instituting the injunction cases before the RTCs of
Biñan and San Pedro, Laguna, and during the pendency of said cases, the Spouses Layos
filed with the Biñan RTC a Complaint 1 0 for Quieting of Title and/or Declaration of
Nullity/Annulment of Title with Damages, against La Paz and the Register of Deeds of the
Province of Laguna, docketed as Civil Case No. B-4194. TAacIE

According to the Complaint, Felipe Layos' grandfather, Natalio Layos, was the original
owner and lawful possessor of two parcels of land (subject property) with a total land area
of 1,068,725 square meters, more or less, situated in Barrio Tubigan, Biñan, Laguna, known
as Lots 1 and 2 of Plan Psu-201 of the Bureau of Lands. The subject property is covered
by OCT No. 239 in the name of Natalio Layos. Upon the death of Natalio Layos, his son,
Mauricio Layos, inherited the subject property. On 15 April 1992, Mauricio Layos executed
an Affidavit of Self-Adjudication with Sale by which he sold the subject property to his son,
Felipe Layos, and the latter's wife, Victoria Layos. The Spouses Layos and their
predecessors-in-interest had exercised their right of ownership by being in open,
continuous, adverse, and peaceful possession of the subject property for more than 80
years, even before Plan Psu-201 was approved by the Bureau of Lands. The subject
property had also been declared for taxation purposes with an assessed value of
P555,737.00.
The Complaint further alleged that in 1992 and 1993, La Paz, in conspiracy with other
persons, entered the subject property and started developing the same without the
consent of the Spouses Layos. The Spouses Layos then discovered that La Paz had in its
name 19 Transfer Certificates of Title (TCTs) which encroached upon portions of the
subject property. The TCTs of La Paz were derived from OCT No. 242, which was issued
on 9 August 1913, or 14 days after OCT No. 239 was issued on 30 July 1913 in the name
of Natalio Layos. Since OCT No. 239 was older or issued earlier than OCT No. 242, the
Spouses Layos asserted that their title under OCT No. 239 was indefeasible against any
other title issued subsequent to it, such as OCT No. 242 and the TCTs of La Paz derived
and issued from the latter.
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 Contending that the TCTs of La Paz, although void ab initio, put a cloud over their title to
and ownership and possession of the subject property, the Spouses Layos primarily
prayed that the said TCTs be declared null and void and be accordingly cancelled in order
to quiet their title. ECTIcS

In their Answer, La Paz and the Register of Deeds denied the allegations in the Spouses
Layos' Complaint, and countered:
21. That [Spouses Layos] have never owned nor possessed the land in
question.
22. That the Original Certificates of Title No. 239 purportedly issued by the
Register of Deeds on November 18, 1913, in the name of Natalio Layos, does not
exist in the files of the Registry of Deeds of Laguna.
23. That Decree No. 7663 dated July 12, 1912, GLRO Record No. 7733 from
whence OCT No. 239 appears to have emanated from likewise does not exist in
the records of the Land Registration Authority. DHAcET

24. That records of Plan PSU-201 are still extant in the Bureau of Lands but it
is not in the name of Natalio Layos, but in the name of another person nor, is the
land covered thereby situated in Laguna.
25. That the certified technical data of Lot Nos. 1 and 2, PSU-201, marked as
Annex 'D' attached to the Complaint was issued on the basis of records that do
not exist in the files of the Lands Office.
26. That in the Affidavit of Self-Adjudication with Sale dated April 15, 1992,
marked as Annex 'C' attached to the Complaint, there is an admission in the third
paragraph by Mauricio Layos to the following effect:
'Which parcels of land are not registered under the Spanish Mortgage Law nor the
Property Registration Decree.[']

27. That the [Spouses Layos'] alleged predecessor, Mauricio Layos, filed an
application for registration of the same land on October 5, 1992, with this
Honorable Court docketed as LRC No. RTC-B-542, which act amounts to an
admission that the [Spouses Layos] and their predecessors-in-interest have no
title to the land. TCcDaE

28. That OCT No. 239 surfaced only when the [Spouses Layos] themselves
filed a petition for reconstitution of their alleged OCT No. 239 with this Honorable
Court on August 11, 1993 (sic) , which has been docketed as LRC Case No. B-
1784.
29. That it is [La Paz's] Certificates of Titles [sic] that are real, genuine and
subsisting, and the originals thereof are extant in the files of the Registry of Deeds
of Laguna.
30. That [La Paz] acquired ownership of these lands from various registered
owners from 1982 to 1988 for valuable consideration.
31. That the lands form part of what used to be called the Biñan Friar Land
estate which the government purchased from Spanish Religious Orders, and later
subdivided and resold at cost to qualified applicants pursuant to Act No. 1120,
otherwise known as the Friar Land Act, and which have fallen finally into the
hands of [La Paz] after a succession of transfers.
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 32. That under Act No. 496, otherwise known as the Land Registration Act,
[La Paz's] titles to the land in question are indefeasible, binding, conclusive and
enforceable against the whole world. 1 1

Following other developments in the case, 1 2 La Paz filed on 22 February 1995 an Omnibus
Amended Motion (for Summary Judgment and Cancellation of Lis Pendens). Acting on the
said Motion, the Biñan RTC issued on 14 July 1995 an Omnibus Order in Civil Case No. B-
4194, the decretal portion of which reads:
WHEREFORE, in view of the foregoing, the instant Omnibus Amended Motion for
Summary Judgment filed by counsel for [La Paz] is hereby GRANTED in
accordance with Rule 34 of the Revised Rules of Court. The Original Certificate of
Title No. 242 issued to the Government of the Philippine Islands and the [La
Paz's] nineteen (19) Transfer Certificates of Title which were respectively derives
[sic] therefrom are hereby declared indefeasible for all legal intents and purposes
against any other title thereby making it binding to the whole world. HEaCcD

Necessarily, the Motion for Leave to Intervene and the Motion for Issuance of a
Writ of Preliminary Injunction, both pending before this Court, are hereby declared
MOOTED.
On the other hand, the Motion for Cancellation of Lis Pendens included in the [La
Paz's] Omnibus Motion for Summary Judgment is likewise GRANTED for the
reasons above-stated.
Consequently, the Office of the Register of Deeds of Calamba, Laguna is hereby
directed to immediately cancel the Notice of Lis Pendens annotated at the back of
each of the [La Paz's] nineteen (19) Transfer Certificates of Title which were all
disputed by the [Spouses Layos].
Meanwhile, let the hearing of the instant case for the reception of evidence as to
the counterclaim of [La Paz] for damages be set for hearing on August 31, 1995
at 8:30 o'clock in the morning. 1 3

When their motion for reconsideration was denied by the Biñan RTC, the Spouses Layos
appealed their case to the Court of Appeals, where it was docketed as CA-G.R. CV No.
50962. In a Decision 1 4 dated 20 February 2001, the appellate court ruled:
Under par. 13 of the [Spouses Layos'] complaint, it was alleged that La Paz['s] title
was issued only on August 9, 1913, which was 14 days after the issuance of the
Layos' title. From the findings of the lower court, August 13, 1913 was the date
when La Paz['s] title was transcribed at the Register of Deeds while that of the
Layos as can be seen in their attached xerox copy of title, the transcription was
made later which was on November, 1913. CaAcSE

The date issued referred to by [Spouses Layos] is the date of the decree of
judgment issued by the Court. But this is not the reckoning period within which
title should become indefeasible in the ambit of the law. The operative act is the
decree of registration which is the transcription at the Register of Deeds. One year
after its transcription in the Register of Deeds, the title becomes indefeasible. It
means therefore, that it is the transcription in the Register of Deeds and not the
date decreed by the Court is the operative act. And this should be the reckoning
date when a title becomes indefeasible.

In the case at bar, we have the scenario that OCT 239 was earlier decreed by the
Land Management Court than OCT 242, but for unknown reasons, OCT 242 was
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 transcribed earlier at the Register of [D]eeds on August 19, 1913 while OCT 239
was transcribed at the Register of Deeds only on November 18, 1913. While the
PSU-201 is of minor importance as even claimed by [Spouses Layos], this court
deem to pass over the same.

[Spouses Layos] contended that the representatives of the Land Management

Bureau, identified and confirmed that the Original PSU-201 in the name of Natalio
Layos and the technical descriptions as appearing in LMB Form No. 28-37R
issued to [Spouses Layos], are true and genuine. But this was denied by the Chief,
Records of [sic] Division of the Bureau of Lands, Mr. Armando Bangayan, the
superior of the Land Management Bureau, alleging in his affidavit that was [sic]
not his signature appearing in the Certification. And to corroborate the denial of
Mr. Bangayan, a certain Engineer Private (sic) J.J. Dalire, Chief of Surveys
Division, Land Management Bureau, PSU-201 which is purportedly covered by
OCT No. 239 is a survey plan in the name of J. Reed and it covers a piece of land
situated in Malate, Manila. Further, the Regional Technical Director for Lands,
Region IV, Roxas Boulevard, Manila has issued an Order declaring PSU-201 of
Natalio Layos as null and void, because it is a spurious document.

Considering the aforementioned, this Court believes that [Spouses Layos] has [sic]
no proof to establish their claim in the present case.
With the foregoing, this court is more inclined to believe the three affidavits
executed by three (3) different individuals coming from different offices that PSU-
201 claimed by Layos is obviously doubtful, contrary to the affidavits of persons
who are subordinates of Bangayan. If this is so, OCT 239 is therefore, patently a
spurious title. 1 5 (Underscoring supplied.)STcAIa

Based on the foregoing ratiocination, the fallo of the Court of Appeals Decision dated 20
February 2001 in CA-G.R. CV No. 50962 reads, thus:
WHEREFORE, finding no reversible error committed on the part of the lower court,
the appealed Omnibus Order dated July 14, 1995 is hereby AFFIRMED. 1 6

Records do not show whether the Spouses Layos filed a motion for reconsideration of the
afore-mentioned Decision of the appellate court; what they do establish is that the
Spouses Layos filed a Petition for Review on Certiorari with this Court, docketed as G.R.
No. 155612, but said Petition was denied by this Court in a Resolution dated 13 January
2003 because of the Spouses Layos' failure to:
a) take the appeal within the reglementary period of fifteen (15) days in
accordance with Section 2, Rule 45 in relation to Section 5(a), Rule 56, in view of
the denial of the motion for extension of time to file said petition in the resolution
of 20 November 2002;

b) properly verify the petition in accordance with Section 4, Rule 7 in relation

to Section 1, Rule 45, and submit a valid certification on non-forum shopping duly
executed by all petitioners in accordance with Section 5, Rule 7, Section 4(e), Rule
45 in relation to Section 2, Rule 42 and Sections 4 and 5(d), Rule 56, there being
no proof that petitioner Felipe Layos was duly authorized to sign said verification
and certification on non-forum shopping in behalf of his co-petitioner; and

c) serve a copy of the petition on the Court of Appeals in accordance with

Section 4, Rule 13, in relation to Section 3, Rule 45 of the 1997 Rules of Civil
Procedure, as amended, and par. 2 of Revised Circular No. 1-88 of this Court. 1 7
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 The Resolution dated 13 January 2003 of this Court denying the Petition in G.R. No.
155612 became final and executory, and entry of judgment was made therein on 14 March
2003. 1 8
G.R. No. 150470:
The Reconstitution Case
The Court now comes to the Petition at bar.
The instant Petition originated from a Petition for Reconstitution 1 9 of OCT No. 239 filed
by the Spouses Layos on 12 August 1993 with the San Pedro RTC, docketed as LRC Case
No. B-1784. It is noted that the Spouses Layos instituted this reconstitution case on the
same day as their quieting of title case before the Biñan RTC. TCaAHI

The Petition in LRC Case No. B-1784 essentially contained the same allegations made by
the Spouses Layos in their Complaints in the injunction cases and quieting of title case.
However, in support of their prayer for the reconstitution of the original copy of OCT No.
239 from their Owner's Duplicate Certificate, the Spouses Layos additionally alleged that:
6. The Owner's Duplicate Certificate of the said Original Certificate of Title is
in due form without any alteration or erasure, and is not subject to litigation or
investigation, administrative or judicial, regarding its genuineness or due
execution or issuance.
xxx xxx xxx

9. The Original Copy of the said title which used to be in the Office of the
Register of Deeds for the Province of Laguna appears to have been lost and/or
destroyed. In fact, the said Office does not anymore have any record regarding the
subject title.
10. The above parcels of land are free from any lien or encumbrance, and no
deed or instrument affecting the same has been presented for registration or is
any such deed or instrument pending registration with the Office of the Register
of Deeds for the Province of Laguna. ScAHTI

11. The above parcels of land are in lawful possession of [Spouses Layos].

12. The transfer of the subject properties from Natalio Layos to Mauricio
Layos (by inheritance) and the subsequent transfer of the same properties from
Mauricio Layos to petitioner Felipe Layos (through the Affidavit of Self-
Adjudication with Sale executed by Mauricio Layos in favor of Felipe Layos)
cannot be registered and new title/s cannot be issued in the name of [Spouses
Layos] because the original copy of said Original Certificate of Title No. 239 was
lost and/or destroyed. 2 0

Several parties filed their intervention and/or opposition to the Petition for Reconstitution
of the Spouses Layos in LRC Case No. B-1784, particularly:
PARTY PLE ADING INTE RE ST/BASIS
Shappel Homes, Inc. Complaint-in-Intervention 2 1 In a Joint Venture with the
Spouses Layos to develop the
subject property
La Paz Opposition 2 2 Existing TCTs over the subject
property

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 FEGDI Opposition 2 3 In a Joint Venture with La Paz
to develop the subject property
as part of the Manila
Southwoods Project
Mauricio Layos Opposition 2 4 Sole child and heir of Natalio
Layos denies alienating or
disposing the subject property in
favor of the Spouses Layos
Spouses Antonio and Purchased portions of the
Norma Saavedra Complaint-in-Intervention 2 5 subject property from Mauricio
Layos and Felipe Layos
Veneracion L. Arboleda, Purchased portions of the
Antonio L. Arboleda, Jr., Complaint-in-Intervention 2 6 subject property from
Mauricio
Lydia Arboleda-David, Layos and/or Felipe Layos
and Antonio M.
Arboleda
Spouses Ponciano and Purchased a portion of the
Annie Miranda Petition-in-Intervention 2 7 subject property from the
Spouses Layos
Bonifacio Javier, The true heirs of Natalio Layos
representing the Heirs Opposition 2 8 deny that the Spouses Layos are
of Natalio Layos in any way related to them
Spouses Marina and Purchased an undivided portion
Generoso Otic Motion for Intervention 2 9 of the subject property from
Mauricio Layos and are, thus,
co-owners of the subject
property with Mauricio Layos

FEGDI and La Paz filed separate Motions to Dismiss, which the Office of the Solicitor
General supported in its Comment on the Petition. On 19 January 1998, the San Pedro RTC
issued an Order, 3 0 the dispositive portion of which states:
Acting therefore on the motion (sic) to dismiss filed by La Paz Housing and
FEGDI, and it appearing that indeed the title sought to be reconstituted,
specifically OCT No. 239 is a forgery as held no [sic] less than the Supreme Court
in G.R. No. 120958, Fil-Estate Golf and Development, Inc., (FEGDI) vs. Court of
Appeals, December 16, 1996, the Court has no other option but to dismiss the
case. DICcTa

Resolution on all other pending incidents had been rendered moot and academic
with the dismissal of this case. 3 1

The San Pedro RTC denied the Spouses Layos' Motion for Reconsideration in an Order 3 2
issued on 1 October 1998.
Aggrieved, the Spouses Layos filed an appeal with the Court of Appeals, docketed as CA-
G.R. CV No. 61759. The appellate court, however, found no reversible error in the ruling of
the lower court dismissing the Spouses Layos' Petition for Reconstitution. According to
the Court of Appeals, the validity of OCT No. 239 of the spouses Layos was already
determined by the Supreme Court in its Decision dated 16 December 1996 in G.R. No.
120958, in which the Supreme Court categorically declared that the said certificate of title
was a forgery. The appellate court contradicted the Spouses Layos' assertion that such
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 declaration of the Supreme Court in G.R. No. 120958 was merely an obiter dictum, for the
same was a resolution of one of the controverted issues and was part of the principal
disquisition of the lower court. Hence, in its assailed Decision 3 3 dated 26 April 2001, the
Court of Appeals decreed:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED, and
the orders of the lower court dated January 19, 1998 and October 1, 1998 are
hereby AFFIRMED. 3 4

The Spouses Layos moved for the reconsideration of the foregoing Decision, but they
failed to convince the Court of Appeals to detract from its earlier ruling. Resultantly, the
appellate court denied what it called the "pro-forma motion for reconsideration" of the
Spouses Layos in a Resolution 3 5 dated 18 October 2001.
The Spouses Layos, thus, filed before this Court the instant Petition for Review on
Certiorari under Rule 45 of the Rules of Court, docketed as G.R. No. 150470, stating the
following assignment of errors:
A. The Court of Appeals erred in applying the principle of res judicata in the
instant case, when it declared that the ruling of this Honorable Supreme
Court in G.R. No. 120958 is conclusive upon the issue of validity of the
[Spouses Layos'] O.C.T. No. 239; CAScIH

B. The Court of Appeals erred in holding that the observation of this

Honorable Supreme Court in G.R. No. 120958 to the effect that OCT No.
239 is a forgery was not merely an obiter dictum, but a resolution of one of
the controverted issues, and is part of the principal disquisition of the
Supreme Court;

C. The Court of Appeals erred in upholding the summary dismissal of the

instant case by the court a quo by holding that since the title sought to be
reconstituted has finally been determined as a forgery and fake, there is no
longer a need for trial and in effect deprived [Spouses Layos] of property
without due process of law; [and]

D. The Court of Appeals erred in upholding the decision of the lower court and
in effect violated the cardinal rule against a collateral attack against the
validity of the land title; 3 6

and seeking the following reliefs from this Court:

WHEREFORE, it is respectfully prayed that judgment be rendered by this
Honorable Court, setting aside the assailed Decision dated April 26, 2001 and
Resolution dated October 18, 2001 respectively of the Court of Appeals which
affirmed the Decision of the Court a quo for being contrary to law and
jurisprudence and directing the Regional Trial Court of San Pedro, Laguna to
forthwith receive evidence of all parties concerned to determine the merits of their
respective claims. HECTaA

Other reliefs just and equitable are likewise prayed for.

II
THE COURT'S RULING
Res Judicata
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 Based on the arguments raised by the parties in their pleadings herein, the foremost issue
for resolution of this Court is whether the Decision dated 16 December 1996 of this Court
in G.R. No. 120958 bars by res judicata LRC Case No. B-1784, the Petition for
Reconstitution of OCT No. 239 filed by the Spouses Layos before the San Pedro RTC, thus,
justifying the dismissal of the latter case.
The Spouses Layos maintain that the Decision dated 16 December 1996 of this Court in
G.R. No. 120958 does not bar by res judicata their Petition for Reconstitution of the same
certificate of title in LRC Case No. B-1784, there being no identity of parties, causes of
action, and subject matters between the two cases. They insist that the Court in G.R. No.
120958 had no jurisdiction to determine the issue of ownership as the same was never
raised or contained in the pleadings and, therefore, any pronouncement of the Court in its
Decision of 16 December 1996 on the validity of OCT No. 239 or on the question of
ownership is mere obiter dictum. They highlight the fact that the fallo of the Court's 16
December 1996 Decision in G.R. No. 120958 simply dismissed the injunction case before
the San Pedro RTC but did not annul or cancel OCT No. 239. AacSTE

The position of the Spouses Layos is untenable.

Res judicata literally means "a matter adjudged; a thing judicially acted upon or decided; a
thing or matter settled by judgment." Res judicata lays the rule that an existing final
judgment or decree rendered on the merits, and without fraud or collusion, by a court of
competent jurisdiction, upon any matter within its jurisdiction, is conclusive of the rights of
the parties or their privies, in all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and matters in issue in the first suit. 3 7
It is espoused in the Rules of Court, under paragraphs (b) and (c) of Section 47, Rule 39,
which provide:
SEC. 47. Effect of judgments or final orders. — The effect of a judgment or
final order rendered by a court of the Philippines, having jurisdiction to pronounce
the judgment or final order, may be as follows:

xxx xxx xxx

(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the parties and their successors in interest by title
subsequent to the commencement of the action or special proceeding, litigating
the same thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment or final
order which appears upon its face to have been so adjudged, or which was
actually and necessarily included therein or necessary thereto.

The doctrine of res judicata lays down two main rules which may be stated as follows: (1)
The judgment or decree of a court of competent jurisdiction on the merits concludes the
litigation between the parties and their privies and constitutes a bar to a new action or suit
involving the same cause of action either before the same or any other tribunal; and (2) any
right, fact, or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which a judgment or decree is
rendered on the merits is conclusively settled by the judgment therein and cannot again be
litigated between the parties and their privies whether or not the claims or demands,
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 purposes, or subject matters of the two suits are the same. These two main rules mark the
distinction between the principles governing the two typical cases in which a judgment
may operate as evidence. 3 8 In speaking of these cases, the first general rule above stated,
and which corresponds to the afore-quoted paragraph (b) of Section 47, Rule 39 of the
Rules of Court, is referred to as "bar by former judgment"; while the second general rule,
which is embodied in paragraph (c) of the same section and rule, is known as
"conclusiveness of judgment". IEcaHS

The Resolution of this Court in Calalang v. Register of Deeds of Quezon City, 3 9 provides
the following enlightening discourse on conclusiveness of judgment:
The doctrine res judicata actually embraces two different concepts: (1) bar by
former judgment and (b) conclusiveness of judgment.
The second concept — conclusiveness of judgment — states that a fact or
question which was in issue in a former suit and was there judicially passed upon
and determined by a court of competent jurisdiction, is conclusively settled by the
judgment therein as far as the parties to that action and persons in privity with
them are concerned and cannot be again litigated in any future action between
such parties or their privies, in the same court or any other court of concurrent
jurisdiction on either the same or different cause of action, while the judgment
remains unreversed by proper authority. It has been held that in order that a
judgment in one action can be conclusive as to a particular matter in another
action between the same parties or their privies, it is essential that the issue be
identical. If a particular point or question is in issue in the second action, and the
judgment will depend on the determination of that particular point or question, a
former judgment between the same parties or their privies will be final and
conclusive in the second if that same point or question was in issue and
adjudicated in the first suit (Nabus vs. Court of Appeals, 193 SCRA 732 [1991]).
Identity of cause of action is not required but merely identity of issue. EaHIDC

Justice Feliciano, in Smith Bell & Company (Phils.), Inc. vs. Court of Appeals (197
SCRA 201, 210 [1991]), reiterated Lopez vs. Reyes (76 SCRA 179 [1977]) in regard
to the distinction between bar by former judgment which bars the prosecution of
a second action upon the same claim, demand, or cause of action, and
conclusiveness of judgment which bars the relitigation of particular facts or
issues in another litigation between the same parties on a different claim or cause
of action.
The general rule precluding the relitigation of material facts or questions
which were in issue and adjudicated in former action are commonly
applied to all matters essentially connected with the subject matter of the
litigation. Thus, it extends to questions necessarily implied in the final
judgment, although no specific finding may have been made in reference
thereto and although such matters were directly referred to in the pleadings
and were not actually or formally presented. Under this rule, if the record of
the former trial shows that the judgment could not have been rendered
without deciding the particular matter, it will be considered as having
settled that matter as to all future actions between the parties and if a
judgment necessarily presupposes certain premises, they are as conclusive
as the judgment itself.

Another case, Oropeza Marketing Corporation v. Allied Banking Corporation, 40

further differentiated between the two rules of res judicata, as follows:
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 There is "bar by prior judgment" when, as between the first case where the
judgment was rendered and the second case that is sought to be barred, there is
identity of parties, subject matter, and causes of action. In this instance,
the judgment in the first case constitutes an absolute bar to the second action.
Otherwise put, the judgment or decree of the court of competent jurisdiction on
the merits concludes the litigation between the parties, as well as their privies, and
constitutes a bar to a new action or suit involving the same cause of action
before the same or other tribunal. cHCSDa

But where there is identity of parties in the first and second cases, but no
identity of causes of action, the first judgment is conclusive only as to those
matters actually and directly controverted and determined and not as to matters
merely involved therein. This is the concept of res judicata known as
"conclusiveness of judgment". Stated differently, any right, fact, or matter in
issue directly adjudicated or necessarily involved in the determination of an
action before a competent court in which judgment is rendered on the merits is
conclusively settled by the judgment therein and cannot again be litigated
between the parties and their privies whether or not the claim, demand, purpose,
or subject matter of the two actions is the same. (Emphasis ours.)

In sum, conclusiveness of judgment bars the re-litigation in a second case of a fact or

question already settled in a previous case. The second case, however, may still proceed
provided that it will no longer touch on the same fact or question adjudged in the first
case. Conclusiveness of judgment requires only the identity of issues and parties, but not
of causes of action.
It is on the ground of res judicata, in its second concept — conclusiveness of judgment —
that the Petition for Reconstitution of the Spouses Layos must be dismissed. As explained
by the Court of Appeals in its assailed Decision:
In the case at bar, the ruling of the Supreme Court in G.R. No. 120958 is
conclusive upon the issue of validity of the [Spouses Layos'] OCT No. 239,
inasmuch as the said issue has already been mutually controverted by the parties
and ruled upon with finality by the Supreme Court no less, in favor of the
invalidity of the [Spouses Layos'] title. 4 1

Conclusiveness of Judgment in G.R. No. 120958

Contrary to the position of the Spouses Layos, there is identity of parties and issues
between G.R. No. 120958 (the injunction cases) and LRC Case No. B-1784 (the
reconstitution case). ICacDE

The principal parties in both cases are the Spouses Layos, on one hand, and La Paz and
FEGDI, on the other. The Spouses Layos and La Paz both claim title to the subject property,
while FEGDI is the partner of La Paz in a joint venture to develop the said property. There
may be other parties named in both cases, but these parties only derive their rights from
the principal parties. The Court has previously held that for purposes of res judicata, only
substantial identity of parties is required and not absolute identity. There is substantial
identity of parties when there is community of interest between a party in the first case
and a party in the second case even if the latter was not impleaded in the first case. In
other words, privity or a shared identity of interest is sufficient to invoke application of the
principle of res judicata. 4 2 It is fundamental that the application of res judicata may not be
evaded by simply including additional parties in a subsequent litigation. 4 3
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 For conclusiveness of judgment, identity of causes of action and subject matter is not
required; it is the identity of issues that is material. The issue of the validity of the Spouses
Layos' title to the subject property is integral to both G.R. No. 120958 and LRC Case No. B-
1784.
In G.R. No. 120958, the Spouses Layos themselves invoked OCT No. 239 to establish their
title over the subject property. It was on the basis of their title to the subject property that
they sought to enjoin FEGDI and La Paz from entering into and developing the same. In
seeking the dismissal of the injunction case before the San Pedro RTC, La Paz presented
its own title to the subject property by virtue of which it claimed the right to possess and
develop the said property. It then became incumbent upon the Court to determine which of
the titles to the property is valid. For the Spouses Layos to be entitled to the issuance of a
writ of injunction, it must have valid title to the subject property. Without a valid title to the
said property, the Spouses Layos had no cause of action for injunction against FEGDI and
La Paz. It was in this context that the Court was compelled to look into the validity of the
Spouses Layos' title to the subject property. SIcEHD

After consideration of the Complaint for injunction of the Spouses Layos and its annexed
documents, the Court observed that: (a) the annexed Affidavit of Self-Adjudication with
Sale, supposedly executed by Mauricio Layos in favor of his son Felipe Layos stated that
the subject property had not been registered; (b) Mauricio Layos filed an application for
registration of the subject property with the Biñan RTC in 1992; (c) Mr. Privadi Dalire, Chief
of the Geodetic Surveys Division of the Bureau of Lands, stated his findings in his letters
dated 12 November 1992 and 15 December 1992, that Plan PSU-201, on which OCT No.
239 was supposed to be based, was actually a survey for J. Reed covering a piece of land
in Malate, Manila, that was heavily damaged and had not yet been fully reconstructed and
microfilmed; and (d) Mr. Sidicious F. Panoy, the Regional Director of the Department of
Environment and Natural Resources (DENR), Region IV, issued an Order dated 5 May 1994,
cancelling all plans pertaining to PSU-201, since it was "a spurious plan and, probably the
result of a manipulative act by scheming individuals who surreptitiously got it inserted in
the records," 4 4 which led the Court to the "inescapable" conclusion in its Decision dated 16
December 1996 that OCT No. 239 is fake or a forgery.
Consequently, the Court of Appeals correctly ruled that the pronouncement of the
Supreme Court in G.R. No. 120958 on the invalidity of OCT No. 239 was not merely obiter
dictum, 4 5 but was a resolution of one of the controverted issues in said case. In fact, it
was on the basis of the said pronouncement that this Court ordered the dismissal of the
injunction case filed before the San Pedro RTC for lack of cause of action.
In LRC Case No. B-1784, the Spouses Layos once again invoked ownership of the subject
property pursuant to OCT No. 239. They sought the reconstitution of the original copy of
OCT No. 239 which allegedly used to be in the possession of the Register of Deeds of
Laguna, but was now lost and/or destroyed, and, in support thereof, they presented their
owner's duplicate of OCT No. 239. However, both La Paz and FEGDI, as well as the Office
of the Solicitor General, opposed the Petition for Reconstitution of the Spouses Layos on
the ground that OCT No. 239 and Plan Psu-201, on which said certificate of title was
based, were spurious. The opposition to LRC Case No. B-1784, thus, raised the question of
whether a valid OCT No. 239 existed in the first place, and could be reconstituted. CAaSED

Reconstitution or reconstruction of a certificate of title literally and within the meaning of

Republic Act No. 26 denotes restoration of the instrument which is supposed to have been
lost or destroyed in its original form and condition. 4 6 For an order of reconstitution to
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 issue, the following elements must be present: 1) the certificate of title has been lost or
destroyed; 2) the petitioner is the registered owner or has an interest therein; and 3) the
certificate of title is in force at the time it was lost or destroyed. 4 7
While G.R. No. 120958 does not bar the institution of LRC Case No. B-1758, the
pronouncement of invalidity of OCT No. 239 by this Court in G.R. No. 120958 is conclusive
upon the San Pedro RTC in LRC Case No. B-1758, precluding it from re-litigating the same
issue and ending up with a contrary ruling. Since the Court already settled in G.R. No.
120958 that OCT No. 239 is fake and a forgery, it would have been a senseless and futile
endeavor for the San Pedro RTC to continue with the reconstitution proceedings in LRC
Case No. B-1758, for there is actually no valid certificate to reconstitute. The court cannot,
and should not, reconstitute a spurious certificate of title and allow the continuous illegal
proliferation and perpetuation thereof. Republic Act No. 26 4 8 provides for a special
procedure for the reconstitution of Torrens certificates of title that are missing but not
fictitious titles or titles, which are existing . 4 9
Resultantly, the San Pedro RTC is left with no other option but to order the dismissal of
LRC Case No. B-1758.
Conclusiveness of Judgment in G.R. No. 155612
During the pendency of the Petition at bar, a significant development took place in the
quieting of title case. The Court had already denied in a Resolution dated 13 January 2003
the appeal of the Spouses Layos in G.R. No. 155612 and, in effect, affirmed the Decision
dated 20 February 2001 of the Court of Appeals in CA-G.R. CV No. 50962. It should be
recalled that in said Decision, the appellate court upheld the validity of OCT No. 242 from
which La Paz derived its TCTs and, at the same time, explicitly found OCT No. 239 of the
Spouses Layos spurious.
This ruling of the Court of Appeals on the spuriousness of OCT No. 239, once again,
constitutes res judicata by conclusiveness of judgment on the Petition for Reconstitution
of the Spouses Layos.
The Spouses Layos and La Paz, asserting their respective titles to and ownership of the
subject property, are parties to the quieting of title case, as well as the reconstitution case.
In their Complaint before the Biñan RTC, the Spouses Layos prayed for the quieting of their
title to the subject property under OCT No. 239 by the annulment or cancellation of the
TCTs of La Paz covering the same property. In answer, La Paz claimed that it was its title
to the subject property under the 19 TCTs, derived from OCT No. 242, which was valid, and
pointed out that it was actually OCT No. 239 and its supporting documents which were
inexistent in the records of the concerned government agencies. Given the contradicting
assertions of the parties, the Biñan RTC and the Court of Appeals, in their original and
appellate jurisdiction, respectively, over the quieting of title case, had to delve into the
issue of validity of OCT No. 239 vis-à-vis OCT No. 242. Necessarily, only one of the said
certificates of title over the same property can be valid, and the 20 February 2001 Decision
of the Court of Appeals in CA-G.R. CV No. 50962 settled with finality that it is OCT No. 242.
The categorical finding of the Court of Appeals in CA-G.R. CV No. 50962 (the quieting of
title case) — that OCT No. 239 is spurious — is now conclusive and binding upon this Court
in its consideration on appeal of the Spouses Layos' Petition for Reconstitution of OCT No.
239, in much the same way and for the same reasons previously discussed herein for the
conclusiveness of this Court's judgment in G.R. No. 120958 (the injunction cases) that OCT
No. 239 is fake and a forgery. cCTaSH

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 Finality of Judgment
A statement in the Spouses Layos' Petition for Review before this Court reveals their
ultimate intent:
The test of a man's honor is his ability to admit his mistake. In the instant case, it
would [be] in keeping with the rule of law and justice for this Most Venerable and
Honorable Court to allow the parties to fully ventilate their claims in the court
below instead of depriving the [Spouses Layos] of their valued property based on
a sweeping obiter dictum by this Court in the FEDGI [sic] case where the [Spouses
Layos'] title was not directly attacked. 5 0

It may be nicely and even deceptively phrased but, simply, what the Spouses Layos pray to
this Court is for the re-litigation of an issue settled conclusively in this Court's Decision
dated 16 December 1996 in G.R. No. 120958, and also in the Court of Appeals' Decision
dated 20 February 2001 in CA-G.R. CV No. 50962. Both Decisions have already become
final, and no part thereof may be disturbed by any court, even if to correct a purported
error therein.
Nothing is more settled in law than that when a final judgment is executory; it thereby
becomes immutable and unalterable. The judgment may no longer be modified in any
respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the modification is attempted to be
made by the court rendering it or by the highest Court of the land. The doctrine is founded
on considerations of public policy and sound practice that, at the risk of occasional errors,
judgments must become final at some definite point in time. 5 1
What cannot be directly done by motion for reconsideration or appeal, given the finality of
the Decisions in G.R. No. 120985 and CA-G.R. CV No. 50962, likewise, cannot be indirectly
done through a separate proceeding. aCTHDA

Under the doctrine of conclusiveness of judgment which is also known as "preclusion of

issues" or "collateral estoppel", issues actually and directly resolved in a former suit cannot
again be raised in any future case between the same parties involving a different cause of
action. Once a judgment attains finality it becomes immutable and unalterable. It may no
longer be modified in any respect, even if the modification is meant to correct what is
perceived to be an erroneous conclusion of fact or law, and regardless of whether the
modification is attempted to be made by the court rendering it or by the highest court of
the land. 5 2
Due Process
The Spouses Layos contend that the Order dated 19 January 1998 of the San Pedro RTC
dismissing their Petition for Reconstitution without a full blown trial deprived them of their
property without due process. The said Order had no evidentiary foundation, being based
entirely on the unjust and sweeping conclusion of this Court in its 16 December 1996
Decision in G.R. No. 120958 that OCT No. 239 is fake or a forgery.
There is no truth in the averments of the Spouses Layos.
Holding a trial in the reconstitution case would be an exercise in futility, because given the
conclusiveness of the judgment of this Court in G.R. No. 120958 and the Court of Appeals
in CA-G.R. CV No. 50962 that OCT No. 239 is fake, forged, and spurious, then the San
Pedro RTC in LRC Case No. B-1758 is, thus, barred from re-litigating the issue and
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 accepting evidence thereon. DTAESI

Furthermore, due process does not require that a trial be held in all circumstances. This
Court, in a Resolution dated 18 November 2003 in Republic v. Sandiganbayan, elucidated
that:
The words "hearing" and "trial" have different meanings and connotations. Trial
may refer to the reception of evidence and other processes. It embraces the period
for the introduction of evidence by both parties. Hearing, as known in law, is not
confined to trial but embraces the several stages of litigation, including the pre-
trial stage. A hearing does not necessarily mean presentation of evidence. It does
not necessarily imply the presentation of oral or documentary evidence in open
court but that the parties are afforded the opportunity to be heard.

A careful analysis of Section 5 of RA 1379 readily discloses that the word

"hearing" does not always require the formal introduction of evidence in a trial,
only that the parties are given the occasion to participate and explain how they
acquired the property in question. If they are unable to show to the satisfaction of
the court that they lawfully acquired the property in question, then the court shall
declare such property forfeited in favor of the State. There is no provision in the
law that a full blown trial ought to be conducted before the court declares the
forfeiture of the subject property. Thus, even if the forfeiture proceedings do not
reach trial, the court is not precluded from determining the nature of the
acquisition of the property in question even in a summary proceeding. DHaECI

Due process, a constitutional precept, does not therefore always and in all
situations require a trial-type proceeding. The essence of due process is found in
the reasonable opportunity to be heard and submit one's evidence in support of
his defense. What the law prohibits is not merely the absence of previous notice
but the absence thereof and the lack of opportunity to be heard. This opportunity
was made completely available to respondents who participated in all stages of
the litigation. 5 3

The Spouses Layos cannot claim deprivation of property without due process when they
were never denied the opportunity to be heard by the courts. The Spouses Layos
repeatedly and persistently sought recourse from the courts, at the risk of forum shopping
(of which it was actually found guilty at one point in G.R. No. 120958). They instituted no
less than four cases before the RTCs of Biñan and San Pedro, Laguna; although based on
different causes of action, all invoked their title to the subject property under OCT No. 239.
They were able to file pleadings bearing their allegations and arguments, reply to their
opponents' pleadings, and present as attachments their documentary evidence. When their
cases were dismissed by the RTCs, they were able to file their motions for reconsideration
and, upon denial thereof, raised their case on appeal to the appellate court. Unfortunately
for the Spouses Layos, however, the Court of Appeals and this Court agreed in the
dismissal of their cases.
That the cases of the Spouses Layos were dismissed by the RTCs even before they reach
trial stage is not denial of due process. The dismissals were due to the lack of merit of
their complaints and/or petitions, already apparent in the pleadings and evidence on
record, and pointed out in their opponents' Motions for Dismissal (in the injunction cases)
and Motion for Summary Judgment (in the quieting of title case).
In a letter dated 8 September 2005 to then Chief Justice Hilario G. Davide, 5 4 made part of
the records of this case, Felipe Layos averred that the conflicting allegations and
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 documents which led this Court and the Court of Appeals in G.R. No. 120958 and CA-G.R.
CV No. 50962, respectively, to declare OCT No. 239 spurious, were fraudulently prepared
and submitted to the courts in a concerted scheme (which sadly seemed to involve their
former counsel, Atty. Vitaliano Aguirre II) to deprive them of the subject property. Now
represented by a new counsel, he requested that he be given a chance to prove that the
subject property is covered by OCT No. 239 and not OCT No. 242. CTDAaE

Even if it is conceded that the allegations of the aforementioned letter are true, no stretch
of interpretation or liberal application of the rules of procedure can grant the San Pedro
RTC jurisdiction in LRC Case No. B-1758, a case for reconstitution, to set aside or reverse
the final judgment made in both G.R. No. 120958 and CA-G.R. CV No. 50962 on the
invalidity of OCT No. 239.
The RTC, acting on a petition for reconstitution, is of limited jurisdiction. Lands already
covered by valid titles in the name of registered owners other than the petitioners cannot
be a proper subject of reconstitution proceedings, thus:
The Court stresses once more that lands already covered by duly issued existing
Torrens Titles (which become incontrovertible upon the expiration of one year
from their issuance under Section 38 of the Land Registration Act) cannot be the
subject of petitions for reconstitution of allegedly lost or destroyed titles filed by
third parties without first securing by final judgment the cancellation of such
existing titles. (And as the Court reiterated in the recent case of Silvestre vs. Court
of Appeals, "in cases of annulment and/or reconveyance of title, a party seeking it
should establish not merely by a preponderance of evidence but by clear and
convincing evidence that the land sought to be reconveyed is his"). The courts
simply have no jurisdiction over petitions by such third parties for
reconstitution of allegedly lost or destroyed titles over lands that are
already covered by duly issued subsisting titles in the names of their
duly registered owners. The very concept of stability and indefeasibility
of titles covered under the Torrens System of registration rules out as
anathema the issuance of two certificates of title over the same land to
two different holders thereof. 5 5 (Emphasis ours.)

It should be pointed out that the validity of the title to the subject property herein had
already been squarely put in issue in Civil Case No. B-4194, the quieting of title case,
instituted by the Spouses Layos before the Biñan RTC, and resolved definitively and with
finality when appealed to the Court of Appeals in CA-G.R. CV No. 50962, in favor of La Paz.
It is a ruling irrefragably beyond the jurisdiction of the San Pedro RTC to overturn or
contradict in LRC Case No. B-1784, the reconstitution case.
The prayer of the Spouses Layos to have LRC Case No. B-1784 remanded to the San Pedro
RTC for trial, if granted, would only be farcical. Should the San Pedro RTC subsequently
grant the reconstitution of OCT No. 239 after the trial, it would only be an empty victory for
the Spouses Layos, for a reconstituted certificate of title, like the original certificate, by
itself does not vest ownership of the land or estate covered thereby. 5 6 The valid title to
the subject property would still be that of La Paz, as determined by the Court of Appeals in
CA-G.R. CV No. 50962, over which the reconstituted certificate of title of the Spouses
Layos cannot prevail. The reconstituted OCT No. 239 would be a mere piece of paper with
actually no title to evidence ownership. IAEcCT

As earlier mentioned, a reconstitution of title is the re-issuance of a new certificate

of title lost or destroyed in its original form and condition. It does not pass upon
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 the ownership of the land covered by the lost or destroyed title. Any change in the
ownership of the property must be the subject of a separate suit. Thus, although
petitioners are in possession of the land, a separate proceeding is necessary to
thresh out the issue of ownership of the land. 5 7
The reconstitution of a title is simply the reissuance of a new duplicate certificate
of title allegedly lost or destroyed in its original form and condition. It does not
pass upon the ownership of the land covered by the lost or destroyed title.
Possession of a lost certificate is not necessarily equivalent to ownership of the
land covered by it. The certificate of title, by itself, does not vest ownership; it is
merely an evidence of title over a particular property. 5 8

Evidently, the Spouses Layos seek more than just reconstitution of OCT No. 239 in LRC
Case No. B-1758. They want to hold a trial so as to prove before the San Pedro RTC the
fraudulent scheme perpetrated by several people, including their former counsel, to
sabotage their cases before the courts; the errors in the Decisions of the courts that have
long attained finality; and, ultimately, the validity of their title to the subject property. Again,
these are matters beyond the jurisdiction of the San Pedro RTC to determine in a case for
reconstitution. If truly the Spouses Layos have been misled and defrauded in a concerted
effort to ruin their chances before the courts, then their recourse is not to persist with this
petition for reconstitution of title, but to institute other actions to hold those responsible
administratively, civilly, and even criminally liable.
Collateral Attack
Finally, the Spouses Layos argue that the Motions to Dismiss of La Paz and FEGDI and the
Comment of the Office of the Solicitor General supporting the dismissal of the Spouses
Layos' Petition for Reconstitution constitute a collateral attack upon the validity of OCT
No. 239, in violation of the proscription laid down by law and jurisprudence against any
collateral attack of a duly registered certificate of title.
The Spouses Layos are clearly mistaken. No collateral attack on OCT No. 239 was made in
LRC Case No. B-1784 (the reconstitution case). The San Pedro RTC dismissed it precisely
because the invalidity of said certificate of title was already determined conclusively and
with finality by the Supreme Court in G.R. No. 120958 (the injunction cases). A similar
ruling of invalidity of OCT No. 239 was rendered yet again in the final judgment of the Court
of Appeals in CA-G.R. CV No. 50962 (the quieting of title case). Therefore, no collateral
attack has been made on OCT No. 239 in the present Petition; the San Pedro RTC, Court of
Appeals, and this Court only abided by the conclusive and final judgment made on the
invalidity of OCT No. 239 in G.R. No. 120958 and CA-G.R. CV No. 50962. DacTEH

In sum, the Decision dated 16 December 1996 of this Court in G.R. No. 120958 and the
Decision dated 20 February 2001 of the Court of Appeals in CA-G.R. CV No. 50962
declaring OCT No. 239 fake, forged, and spurious, already bar the reconstitution of OCT
No. 239 under the doctrine of res judicata, in the concept of conclusiveness of judgment.
There is, therefore, no need to remand the case to the San Pedro RTC for trial.
WHEREFORE, premises considered, the instant Petition for Review is hereby DENIED. The
Decision dated 26 April 2001 and Resolution dated 18 October 2001 of the Court of
Appeals in CA-G.R. CV No. 61759, affirming the Order dated 19 January 1998 of the
Regional Trial Court, Branch 93 of San Pedro, Laguna, in LRC Case No. B-1784, which
dismissed the Petition for Reconstitution of OCT No. 239 filed by the petitioner-spouses
Felipe and Victoria Layos, are hereby AFFIRMED. Costs against the petitioner-spouses.
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 SO ORDERED.
Ynares-Santiago, Austria-Martinez, Nachura and Reyes, JJ., concur.
Footnotes

1. Rollo, pp. 11-31.

2. Penned by Associate Justice Rodrigo V. Cosico with Associate Justices Ramon A.
Barcelona and Alicia L. Santos, concurring; rollo, pp. 32-38.
3. Penned by Judge Francisco Dizon Paro, rollo, pp. 41-43.

4. Penned by Associate Justice Martin S. Villarama, Jr. with Associate Justices Conrado M.
Vasquez, Jr. and Eliezer R. de los Santos, concurring; rollo, pp. 39-40.
DAESTI

5. 333 Phil. 465 (1996).

6. Id. at 468-474.
7. Id. at 475-487.
8. Id. at 494-499.
9. Id. at 499.
10. Rollo, pp. 452-460.
11. Id. at 465-466.
12. Related to the filing by the Spouses Layos of a Petition for Notice of Lis Pendens and
the filing by unnamed parties of a Motion for Leave of Court to Intervene.
13. Rollo, pp. 461-462.
14. Penned by Associate Justice Eloy R. Bello, Jr. with Associate Justices Eugenio S.
Labitoria and Perlita J. Tria Tirona, concurring; rollo, pp. 461-474.
15. Id. at 472-473.
16. Id.
17. Id. at 475-476.
18. Id.
19. Id. at 477-482.
20. Id. at 479-480.
21. Records, Vol. 1, pp. 84-86.
22. Id. at 173-184
23. Id. at 195-204.
24. Id. at 264-270.
25. Id., Vol. II, pp. 407-409.
26. Id. at 428-431.
27. Id. at 529-532.
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 28. Id., Vol. III, pp. 797-798.
29. Id. at 827-829.
30. Rollo, pp. 41-43.
31. Id. at 43.
32. Id. at 44.
33. Id. at 32-38.
34. Id. at 38.
35. Id. at 39-40.
36. Id. at 16.
37. Oropeza Marketing Corporation v. Allied Banking Corporation, 441 Phil. 551, 563
(2002). HAaDTI

38. Vda. de Cruzo v. Carriaga, Jr., G.R. No. 75109-10, 28 June 1989, 174 SCRA 330, 338.
39. G.R. No. 76265, 11 March 1994, 231 SCRA 88, 99-100.
40. 441 Phil. 551, 564 (2002).

41. Rollo, p. 35.

42. Sendon v. Ruiz, 415 Phil. 376, 385 (2001).
43. Javier v. Veridiano, II, G.R. No. 48050, 10 October 1994, 237 SCRA 565, 571.
44. Supra note 5.
45. Obiter dictum simply means "words of a prior opinion entirely unnecessary for the
decision of the case" ("Black's Law Dictionary", p. 1222, citing Noel v. Olds, 78 U.S. App.
D.C. 155) or an incidental and collateral opinion uttered by a judge and therefore not
material to his decision or judgment and not binding ("Webster's Third New International
Dictionary", p. 1555). (Sta. Lucia Realty v. Cabrigas, 411 Phil. 369, 382-383 [2001].)
46. Vda. de Anciano v. Caballes, 93 Phil. 875, 876 (1953).
47. Antonio H. Noblejas and Edilberto H. Noblejas, Registration of Land Titles and Deeds,
1992 Revised Edition, p. 242.
48. An Act Providing a Special Procedure for the Reconstitution of Torrens Certificate of
Title Lost or Destroyed.

49. Cañero v. University of the Philippines, G.R. No. 156380, 8 September 2004, 437 SCRA
630, 641. DISTcH

50. Rollo, p. 20.

51. Mayon Estate Corporation v. Altura, G.R. No. 134462, 18 October 2004, 440 SCRA 377,
386.
52. Lu Do Lu Ym Corporation v. Aznar Brothers Realty, Co., G.R. No. 143307, 26 April 2006,
488 SCRA 315, 323-324.

53. 461 Phil. 598, 613-614 (2003).

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 54. Rollo, pp. 400-414.
55. Director of Lands v. Court of Appeals, 181 Phil. 432, 439 (1979). Reiterated in Alabang
Development Corporation v. Valenzuela, 201 Phil. 727, 744 (1982); Metropolitan
Waterworks and Sewerage System v. Sison, 209 Phil. 325, 337 (1983); Serra Serra v.
Court of Appeals, G.R. No. 34080, 22 March 1991, 195 SCRA 482, 494; and Ortigas & Co.,
Ltd. Partnership v. Judge Velasco, 343 Phil. 115, 136 (1997). acSECT

56. Alonso v. Cebu Country Club, Inc., 462 Phil. 546, 565 (2003).
57. Lee v. Republic, 418 Phil. 793, 803 (2001). See also Alonso v. Cebu Country Club, Inc.,
426 Phil. 61, 86-87 (2002); Heirs of de Guzman Tuazon v. Court of Appeals, 465 Phil.
114, 126 (2004).

58. Strait Times, Inc. v. Court of Appeals, 356 Phil. 217, 230 (1998).

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